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Estonia ranks 18th in net impact on global innovation

Estonia ranks 18th in how its domestic policies support worldwide innovation, according to an analysis released today by the Information Technology and Innovation Foundation (ITIF), a global technology policy think tank.

The findings come in a new report assessing 56 countries—which together comprise close to 90 percent of the world’s economy—on the extent to which, on a per-capita basis, their economic and trade policies contribute to and detract from innovation globally.

“As countries increasingly vie for leadership in the innovation economy, they can implement policies that try to benefit only themselves but harm the production of innovation in the rest of the world. Or they can implement ‘win-win’ policies that bolster their own innovation capacity while also generating positive spillovers for the entire global economy. For innovation to flourish around the world, we need a system that is doing much more of the latter,” said co-author Stephen Ezell, ITIF’s vice president for global innovation.

While previous research has ranked countries based on innovation capabilities or outcomes, this report is the first to assess the impact of countries’ policies on the broader innovation system. The authors examined 14 factors that not only support innovation domestically but have positive spillover effects globally, such as supportive tax systems and investment in research and development, and human capital, and another 13 factors that have negative spillover effects, such as forced localization and weak intellectual property protection. Estonia’s 18th-place overall ranking reflected a combination of policies that the report found to be 24th best in their positive contribution to the global innovation ecosystem and also the 10th least damaging.

The report also found a strong correlation between countries’ contributions to global innovation and their levels of domestic innovation success, meaning that doing well domestically on innovation policy can also mean doing well for the world.

The Information Technology and Innovation Foundation (ITIF) is a nonprofit, nonpartisan research and educational institute focusing on the intersection of technological innovation and public policy.

Oviir says environmental fees could be lowered temporarily

Estonia could temporarily lower environmental charges to prevent further job cuts in the energy sector, Minister of Entrepreneurship Liisa Oviir said on Friday.

"In conjunction with Enterprise Estonia and the foundation for the development of East-Viru industrial areas we are very actively engaged in luring new entrepreneurs to the region, but this is a long process. East-Viru county needs faster solutions today," Oviir told BNS. "One of them could be the proposal already being discussed at the Ministry of Economic Affairs and Communications to temporarily lower environmental charges on the condition that jobs are preserved."

"The decision of the Estonian government made on Thursday to permit Eesti Energia to take part in virtual green energy trade will help ease the difficult situation arising from low oil prices at the company which also employs hundreds of people. Besides a controlled increase of the use of biomass will give a positive impetus to raising the felling volumes in our forests, which will create additional jobs in the region. The Finance Ministry meanwhile is devising a methodology for the calculation of resource charges depending on the world market price of the end products of oil shale," the minister said.

Oviir described it as a cause for concern that the biggest employers of East-Viru county represent a single sector. Considering the difficult situation of the oil shale sector, active efforts are required to bring alternative employers to East-Viru county, she said.

Settling in Estonia will become easier for foreign specialists

Amendments to the Aliens Act will be implemented on January 1 that will make settling in Estonia easier for foreign specialists and highly qualified people looking for long-term self-fulfillment in Estonia.

“Amendments to the Aliens Act that come into force in the next year continue the changes already introduced two years ago,” Minister of the Interior Hanno Pevkur said. “We welcome foreigners who are ready to contribute to the development of Estonia. The changes will make it easier for foreigners coming to Estonia to deal with necessary documents and will ensure better self-fulfillment conditions.”

From January onward, a foreigner who comes to work to Estonia is able to simultaneously work for several employers upon the condition that work-related provisions set out in the residence permit are complied with. In order to commence work with another employer a permission of the Estonian Unemployment Insurance Fund, payment of the salary in the amount set out in the law, and notification are no longer required.

Approval of the Estonian Unemployment Insurance Fund required to apply for a residence permit for working in Estonia is no longer personalized. It means that the Estonian Unemployment Insurance Fund may provide to a company an approval to fill one or several positions with foreigners, where employees with respective skills and qualifications cannot be found in Estonia. At the same time there is an option for foreigners staying in Estonia on a short-term basis or on the basis of a temporary residence permit to work as temporary (rent) workers. According to the changes, Estonian employers have the opportunity to hire foreigners though recruitment agencies.

In order to provide for a more flexible extension of Estonian residence a 90-day transitional period is provided after the expiration of a residence permit (183-day period with regard to foreign students graduated from Estonian universities and researchers/professors). During this time period a foreigner may stay in Estonia and apply for a residence permit on a new basis – be it a residence permit for establishing one’s own business, working or further studies.

Since 2016 it will be possible to apply for a new temporary residence permit (i.e. a permit for permanent residence in Estonia). It can be issued to a foreigner for a period of up to five years, and its aim is to make it easier for people who have adapted to life in Estonia and received a residence permit to continue living, working, studying and doing business in Estonia.

As of today, 23,787 foreigners possess temporary Estonian residence permits. Majority of them are citizens of the Russian Federation and Ukraine, followed by people with no citizenship and citizens of the United States of America.

Institute expects Estonian economy to grow 2.5 pct in 2016

The Institute of Economic Research (EKI) estimates that the economic situation has somewhat deteriorated but the six-month outlook is moderately positive and predicts 2.5 percent growth for the Estonian economy this year.

Estonia's economic growth in 2015 will apparently be slower than the 2.9 percent registered in 2014 and also fall short of the expected 2 percent, it appears from the institute's fourth-quarter economic review.

EKI analysts in December rated the overall situation of the Estonian economy with 4.3 points, 1.1 points lower than in the previous review in September. Some 82 percent of the analysts regard the situation as satisfactory and 18 percent, as poor.

The investment situation is considered satisfactory by 24 percent and bad by 76 percent of the analysts. The consensus rating of 1.9 points is the lowest since the second quarter of 2010.

The private consumption situation is seen as good by 76 percent and as satisfactory by 24 percent of the analysts. The consensus rating of 8.1 points is the highest since the second quarter of 2007. EKI estimates private consumption to have grown by more than 5 percent in 2015.

Some 35 percent of the analysts expect the economic situation will have improved six months from now, 41 percent believe there will be no change and 24 percent anticipate a deterioration. The overall assessment of the six-month outlook is 5.5 points, 0.1 point higher than in September.

The investment situation is expected to improve over the next six months by 24 percent, remain unchanged by 47 percent and turn for the worse by 29 percent of the analysts. Six percent believe the private consumption situation will improve, 59 percent think it will not change and 35 percent expect the situation to worsen.

Export volumes are expected to increase by 41 percent, stay at present levels by 35 percent and decrease by 24 percent of EKI analysts. At the same time 47 percent think imports will grow while 35 percent expect no change and 18 percent think the volume of import will decline.

Even 71 percent of the analysts believe inflation will pick up in 2016 while 29 percent expect no change. Consumer prices are forecast to rise by 1.1 percent in 2016 and the long-term forecast until 2020 is 2.0 percent.

Government approves new oil shale rock development plan until 2030

The government approved a new, 15-year development plan for Estonia's most lucrative natural resource – the oil shale rock. The new plan, if approved, will keep mining quotas at the current 20-million-tons-per-year level.

Environment Minister Marko Pomerants said the resource must be used more efficiently, such as turning it into shale oil, and in a more environmentally friendly manner.

The plan sees more focus on research into new production technology with the total cost of the development plan implementation set at 20 million euros. The government said that price could increase through more research funding.

The state said it will have a new oil shale tax system ready by 2017, a system which better takes into account outside variables, such as the world price of petrol or energy.

Currently, companies are allowed to mine 20 million tons of the rock each year. Currently less is mined and at least one or two new mines would have to be opened to keep up with that level, if deemed necessary.

Pomerants said the aim of the plan is to decrease oil shale's part in electricity production to 50 percent and heat to 80 percent.

Valdur Lahtvee of the Stockholm Environment Institute's Tallinn branch, said he does not believe talk by the government of the new development plan's aim of decreasing the environmental impact as there are new means for reaching the aim stated in the the plan.

According to government estimates, Estonia has around 1 billion tons of oil shale rock which can be mined outside of settlements and natural reserves.

The entire industry has been hit by low energy and petrol prices in the last 12 months, with hundreds of jobs cut. Some jobs have been restored as the private sector has been given more mining rights.